AOL's Patch local news sites hit by staff layoffs

Staff and wire reports

AOL Inc. began laying off editors at its Patch community news websites Friday, including some in eastern Connecticut and throughout the state.

The New York-based company, which eventually is expected to shed up to half of its 1,000 employees, also will shut down many of its 900 websites and seek partnerships for those that remain.

Decisions about which sites would be removed from the Internet had yet to be made, or at least had yet to be communicated to all employees, Patch sources said.

Employees learned their fates Friday by dialing in to conference calls, according to a source who spoke on condition of anonymity. Employees told to call at a certain hour were informed they were being let go immediately, while those instructed to call at another time were told they would be laid off in October, the source said. Those told to call at a third time were told they would be keeping their jobs.

Editors of some local sites revealed their status on social media.

Patch's eastern Connecticut region comprises 42 websites.

AOL Inc. CEO Tim Armstrong co-founded Patch, an ambitious experiment in local news meant to compete with newspapers, in 2007. AOL bought it in 2009 after Armstrong had taken over the helm of the New York-based Internet company.

Patch ran into the same problems that newspapers had already discovered — that it's expensive to cover local news. For about an 18-month period in 2010 and 2011, Patch was the biggest hirer of journalists, just as they were being laid off from struggling U.S. newspapers, media analyst Ken Doctor of Outsell Inc. said.

AOL does not break out Patch's finances in its earnings reports, but Doctor said it was obviously "a financial drag on earnings." He estimates that AOL has invested more than $100 million into Patch over time.

In a statement, AOL said that "Patch's strategy will be to focus resources against core sites and partner in sites that need additional resources."

Shares of AOL, which also owns the Huffington Post and TechCrunch, fell 31 cents to $35.14 in midday trading.

Commenting is closed. Comment threads are monitored for 48 hours after publication and then closed.